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Released: Monday, October 21, 2002

The Conference Board announced today that the U.S. leading index decreased 0.2 percent, the coincident index held steady, and the lagging index decreased 0.6 percent in September.

  • The leading index declined for the fourth consecutive month in September. This weakness has been primarily fueled by weak equity markets, a narrowing interest rate spread, and deteriorating consumer expectations.
  • · The coincident index continues to show a weak economic recovery. Industrial production and nonagricultural payrolls showed mild weakness in September but were offset by modest gains in income and manufacturing and trade sales.

Leading Indicators. Five of the ten indicators that make up the leading index decreased in September. The negative contributors - from the largest negative contributor to the smallest - were stock prices, average weekly initial claims for unemployment insurance (inverted), interest rate spread, manufacturers' new orders for nondefense capital goods*, and index of consumer expectations. The four positive contributors to the index - beginning with the largest positive contributor - were vendor performance, building permits, real money supply*, and manufacturers' new orders for consumer goods and materials*. Average weekly manufacturing hours held steady in September.

The leading index now stands at 111.6 (1996=100). Based on revised data, this index decreased 0.1 percent in August and decreased 0.2 percent in July. During the six-month span through September, the leading index decreased 0.3 percent, with five of the ten components advancing (diffusion index, six-month span equals 50 percent).

Coincident Indicators. Two of the four indicators that make up the coincident index increased in September. The larger contributor to the index was personal income less transfer payments*, followed by manufacturing and trade sales*. The larger negative contributor to the index was employees on nonagricultural payrolls, followed by industrial production.

Holding steady, the coincident index now stands at 115.1 (1996=100). Based on revised data, this index increased 0.1 percent in August and increased 0.2 percent in July. During the six-month period through September, the coincident index increased 0.7 percent.

Lagging Indicators. The lagging index decreased 0.6 percent to 100.0 (1996=100) in September. Two of the seven components declined in September. The negative contributors to the index - beginning with the larger negative contributor - were average duration of unemployment and commercial and industrial loans outstanding*. Change in CPI for services and change in labor cost per unit of output* both had equal positive contributions to the index. The ratio of consumer installment credit to personal income*, the ratio of manufacturing and trade inventories to sales*, and average prime rate charged by banks held steady in September. Based on revised data, the lagging index decreased 0.1 percent in August and increased 0.1 percent in July.

Data Availability. The data series used by The Conference Board to compute the three composite indexes and reported in the tables in this release are those available "as of" 12 Noon on October 18, 2002. Some series are estimated as noted below.

*Notes: Series in the leading index that are based on The Conference Board estimates are manufacturers' new orders for consumer goods and materials, manufacturers' new orders for nondefense capital goods, and the personal consumption expenditure deflator for money supply. Series in the coincident index that are based on The Conference Board estimates are personal income less transfer payments and manufacturing and trade sales. Series in the lagging index that are based on The Conference Board estimates are inventories to sales ratio, consumer installment credit to income ratio, change in labor cost per unit of output, and the personal consumption expenditure deflator for commercial and industrial loans outstanding.

THESE DATA ARE FOR ANALYSIS PURPOSES ONLY. NOT FOR REDISTRIBUTION, PUBLISHING, DATABASING, OR PUBLIC POSTING WITHOUT EXPRESS WRITTEN PERMISSION.

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